Need advice on how to deal with dodgy builder. EDR or not EDR

Good afternoon. Desperately need your help on what best to do/how to deal with dodgy builder. Apologies in advance as it’s a rather lengthy story

I purchased an investment property in Marsden in Nov last year. It’s a high set 3 bedrooms house, downstairs was using as garage and storage which we intended to rent out after doing some renos. I’m a newbie and it’s our very first bite of Brisbane market and this is very first renovation experience. At the time of buying, we were in Sydney. After seeking recommendations we engaged a well known builder which I’m sure some of respectable investors in the forum have used before, as project manager. I asked him to give me a completed quote for turning the space downstairs into a living space completed with 2 bedrooms, kitchenette, a shower and laundry, and also fix up few other matters and the shower upstairs since there was sight of water leak. (Note: downstairs space is not of legal height). He visited the site number of times before the renovation began and told me he’d put all the team he has to work and it’d take max about 3 weeks to have it completed and agreed to start the work once the property settled which is on 21st Nov last year. We then received quotes. Few thing didn’t shown up in the quotes and I asked him, but always been told it’s just formal things, I don’t need to worry about it, it’s all included (I stupidly believed him).

The renovations however has been dragged out to 14 weeks and to this point, there are unfinished jobs and very poor workmanship. During those 14 weeks, there are numerous of time, we had to ask him to fix what they done as it wasn’t right or it was illegal (which we found out by chance). There has been times where his workers using drugs on site (which I wasn’t aware till quite the end). We have had numerous meeting with him at the house pointing out the problems and he kept saying he will fix it. About 2 weeks ago, I’ve had enough so I told him to not come to the site anymore and we’d seek legal advice. I since then I realized I should have a signed contract (this was my fault, I’ve never done renovation before, we were in the middle of relocating process so I didn’t realy think of it. Plus, knowing he’s done lots of similar works for quite few reputable investors in the forum, to be honest, I have totally trusted him. No excuse, I know).

I’ve paid him all of the progressive invoices, accept for those expected to pay at completion. Since I told him to stop coming to the site, I’ve been receiving numerous emails and phone calls from his subcontractors asking for unpaid invoices that they done at the house. And he’s been avoiding us, not returning our msg or phone calls.

I’ve spoken to QBCC and they suggested we do an early dispute resolution (EDR) and lodge a complaint. With regard to the balance remaining, they cant advice us on that, and thus we should talk to a solicitor. However, I feel that with the amount of time I’ve given him to rectify the problems, i cant bear to have him back on site any longer. Plus we have tenants moved in 4 weeks ago (next door neighbour’s friend desperately need a place to call home. thankfully,) while they were still fixing the plumbing issues downstairs and they have leave equipment in a very unsafe stage when living the site at nights. With the potential rent that I’ve lost, the unfinished work, plus poor workmanship, the amount of money we owe him is not even enough to cover the cost of it all

This has been a very expensive experience for me both financially and emotionally and I don’t wish anyone to have to encounter it, but Im wondering if any of you have had similar experience, and what’d you do/done to resolve the dispute/problems. Or could suggest what is the best possible, most effective and inexpensive way to deal with the whole situation and to protect ourselves. I do realised ive made lots of mistakes with this reno, and most of them could be avoided. However, what done’s done.At this point, I really want to call it a stop and avoid any more further lost/expenses. So my question is: how should I do it.

Appreciate any suggestions/recommendations.

Thank you all.

CA

 

Yikes! You'll have to just grit your teeth and focus on what comes next. You want the best possible and most effective outcome and you don't want to have to deal with the builder personally again.

1. PAY FOR LEGAL ADVICE. Google "Brisbane building and construction lawyers", or PM @RPI he is Brisbane-based and might be able to help, or point you in the direction of someone who can. (I've never met or used his services, but he frequently contributes here on PC)

2. Let lawyer deal with the builder if you don't want to.

3. Take whatever action is recommended by lawyer if it makes sense to you. If it doesn't make sense, ask them to explain further.

4. Don't beat yourself up over this. Lesson learned, never to be repeated.

The end.

 

Your main problem is insufficient head height, and no council approval, which probably makes all your building work illegal.

Renting it separately may not be an option.
Marg

 

Agree with that.

Is the work more than $11k. Did he pay QBCC insurance for same?

If he has invoiced you and on the bottom it says
"This is a payment claim under the Building and Construction Payments Act" or similar then it may be a payment claim and if you don't dispute it then it becomes recoverable as a debt.

What's your total spend? If they haven't used BCIPA then we can go a dirty letters route and costs can stay down.

Litigation is expensive and stressful, your energies and mind are often better turned to making money elsewhere. Can usually get good traction early on and often get a commercial settlement out of it, but once you get into it you need to decide on an exit point that is proportional to your loss and the complexity of the fight. Simple magistrates court matter could top out at $10k or can run to $120k if complex or difficult on other side.

 

Hi CA

The QBCC's EDR (early dispute resolution) process may be the most cost effective way forward in the first instance (it is free). Obviously without full details of the value of the build, contractual arrangement and the issues it is impossible to know for sure if EDR is the best way forward to achieve a satisfactory result.

EDR is only possible if the contract is still 'on foot' (not completed or terminated) and both parties are willing to mediate. If you definitely do not want to deal with the builder again or alternatively, if you lodge an EDR complaint and the builder refuses to co-operate, then it is most likely that no resolution will be able to be brokered via this process. If this is the case you may need to seek legal advice on the best way forward.

Often, however, the relationship between the owner and the builder has broken down due to a lack of communication, and the builder may well believe that he has been fulfilling his side of the agreement, and that you have now refused him access to complete and / or rectify the works.

The use of an independent person to manage each side's expectations can sometimes help and get a project back on track. My opinion is that even if it doesn't feel like its worth the hassle to get the builder back, it will be easier to preserve your rights to statutory warranties (12mths for non-structural defects, 6yrs 3mths for structural defects) if the builder remains responsible for all the works. It gets much more difficult to determine responsibility for defects that may arise down the track if you get someone else in to fix or finish off some elements of the build.

Here's a link to the EDR page on the QBCC website;
Complaints before your contract has been completed

You will most likely also need to provide a fairly detailed list of the issues. It is sometimes worth getting an independent inspection done to identify all of the issues if you are not sure whether certain things are up to standard or would normally be the builders responsibility, as well as some form of legal advice.

As RPI mentioned, you will have to trade off the cost of legal advice and / or a building inspection against the value of the work you are wanting rectified.

If the cost of getting expert advice outweighs the benefit, you could try EDR first up and see how you go?

Hope this helps. GM

 

Like the garage to be rented out ???
Its hard to settle a legal dispute between two parties who both want to breach laws.

 

CA,

You may want to first pursue your complaint with the QBCC - they should give a direction to rectify. If the builder does not comply or an agreement cannot be reached, then you will get a form allowing you to bring a complaint in QCAT (this is similar to NCAT in New South Wales).

Prior to filing an application in QCAT, you may first wish to conduct a QBCC licence (and an ASIC) search of the builder and find out his licensing position. If it indicates that there issues concerning its solvency, then you may wish to make a claim under the home warranty insurance (keep in mind that there are strict time limits for this).

Before going to QCAT you should have an independent building inspector inspect the property and give a report on the defects (and give an estimate of the amount to have the defects rectified). This, along with any other claims that you may have with respect to delay, filing costs, etc, will be the basis of your claim.

You should obtain legal advice (this is not legal advice). Local solicitors with construction expertise should be able to handle a residential building dispute matter.

 

THanks Marg. Cant agree with you more. Was just trying to maximize the rental return and options. Have learnt heaps from the experience. IT was an eye opener for us

 

Hi RPI, thanks for you reply. The total amount to over 50k and from what you said and from all the information i have, i dont believe he has insurance or anything similar. He has been out of reach for us since, and we are still trying to fix what he hasnt done/didnt do properly.

 

Thank heaps Yllenk

 

Thanks Phase2. Your comment puts a smile on my phace .

 

What a mess.

I can't say much, besides you may be going to learn 2 expensive lessons, or 3 maybe.

One thing I can tell you, if you get a low paid job and make enough mistakes when young, you should stop making them by the time you get old, well the low paid job will help too stop you too


Can I ask what you want to do exactly ?

You have stopped him from coming, tell the trades to chase the builder, I would forget about trying to finish this as you do not have legal height for bedrooms.

I find it a bit worrying that this so called builder would be known by many here, so how many have been doing illegal building works too own properties....